International marketing case studies pdf

So, let us start by first understanding Marriott International as a company. Marriott International, Inc. Founded by J. It is one of the most reputed organizations in the hospitality industry and has 30 brands diversified as per convenience and comfort. Now that we have understood the company in brief, let us go through the customer profile of Marriott International by examining its target market.

A Target Market refers to a group of individuals identified as being likely customers of a business. The target market usually includes customers who share similar demographic traits. This is how Mariott International segments its target market:. The JW Marriot, created by Marriott international as a luxury brand, is meant to focus on customers who are seeking a quiet and opulent atmosphere during their accommodation.

Marriott International has successfully built up different target markets within its industry by specifically targeting the requirements of its customers. Therefore their customers are mostly individualistic, sophisticated, and self-defined travellers who are willing to spend extra money on their accommodations as well as people travelling on a business trip. Now, let us study more about the company by going through Marriotts 4Ps of the marketing mix in the next section.

Marketing mix is commonly used to describe the set of techniques a company uses to get its message to the target market. Even more, a marketing mix can also be used to understand what a business is doing from a marketing perspective. Marriott is one of the foremost recognized luxury hotel chains. It has a unique product strategy that is centred around luxury travellers.

For Marriott, the core product in its marketing mix is within the sort of hospitality services. Their product strategy covers everything that goes into running the hotels. They have over 30 brands that include popular hotels like Ritz-Carlton, Sheraton, Renaissance, and many others. The company has categorized its brands under the following tags: Luxury, Premium, Select and Longer Stays.

This helps customers to choose the hotels based on their travel plans and convenience. Marriott International strives to deliver exceptional guest experiences that are consistent across all of its branded hotels and resorts in all locations and on all channels. It also works extensively on launching new brands based on different themes that cater to new and existing customers. Marriott International is one of the few organizations that has been successful in maintaining pricing power despite significant competitive price discounting, volume shrinkage, and increased room supply.

The prime motive of the company is to deliver a top-notch experience that exceeds customer satisfaction for the price they pay. It has largely succeeded because the different hotel brands have been able to maintain differentiated value propositions in terms of their brand promise and brand appeal. Marriott International is well-known and is one of the biggest hotel chain companies in the world regarding the number of hotels they manage and operate both in different parts of the world and in the United States.

Choosing the ideal place and distribution strategy has played a vital role for Marriott in its journey over the years. Since its foundation, it has established itself in more than countries and the placements of its hotels are mainly centred in and around major cities and towns of a country. Apart from that, Marriott primarily focuses on promoting itself and its brands through digital mediums.

Now that we have an understanding of the marketing mix of the hospitality giant, let us go through the Marriott marketing strategies in the coming section.

It has shifted its focus to market itself more digitally than using the traditional marketing approach. So let us understand the strategies and campaigns it has implemented to provide an overall better customer connection and service.

M Live is a platform, wherein the M Live team tracks a variety of topics that are popular worldwide and organizes its content around these topics. Furthermore, It also targets people on an individual level. For example, recently a traveller tweeted a question about hotels in Nashville, USA, and received relevant suggestions from M Live. If Disney had tried to employ the same lack of cultural sensitivity and awareness that they did in France many of the problems would also have happened in Spain.

The Shanghai development will benefit from the Hong Kong experience. Disney now has a better understanding of the Chinese cultural and what they people want. They want a fairy tale, not an amusement park that looks like all the others.

Disney will now being able to market the park much better considering what they have learned from the Hong Kong experience. They must continue their research and found out what their target audience wants to see. With that being said, Shanghai Development should be a success. Now that Disney has begun work on the new Hong Kong and Shanghai locations, where and when should it go next? Assume you are a consultant hired to give Disney advice on the issue of where and when to go next.

These cities have large population with potential large target markets. I believe Disney should wait until Shanghai location is completed before starting the next. I recommend building at one of the three locations listed above 5 years after Shanghai is completed. I would start with Seoul, South Korea due to the fact that it is another Asian country.

An understanding has been made with Hong Kong and Tokyo. With all that Disney has learned, they could create an amazing park at this location.

It has a young population with more than half the citizens under This is a nation to watch and it remains third on my list for expansion by Disney when the individual buying power increases. Australia is an obvious choice for its distance from other locations so that it would not cannibalize other locations attendance and the fact that it is English speaking. It is also close enough to the Asian markets that people from Japan might enjoy the variety.

English language would facilitate the transfer of technology and fairytales to Australia. It would still be vital to have in country expertise pertaining to culture and business. It is, however, a more compact nation which enables easier travel to the Disney location.

Canadians are able to access the American market through easy transportation so it is well serviced and loves Disney World. I think the similarities in the national characters make it likely that Australian with the requisite grumbling would love it too. It has long enjoyed Disney movies as an adjunct to its own culture so it has been primed for this expansion as well. Australia should remain on the list for future expansion especially as it has such a distinct set of animals but it rates second on my list.

It is a powerful emerging nation with a strong culture. It emerged strongly from the recent economic troubles and its GDP is growing. At this level of individual income, vacations become accessible for the general population. A problem might arise in the language barrier between Portuguese and Spanish, however. While the country is a mix of diverse ethnicities, the language is quite uniform across the entire country.

The native population alone would be sufficient to support the venture. As always, it would be vital to have in country consultants and experts to determine appropriate attractions, marketing and business processes.

In all of the locations, I think it is likely that American tourists will be drawn to worldwide Disney sites for the familiarity and a sense of safety in their travels. Give your choice of local X for the newest Disneyland, what are the operational implications of the history of Euro Disney for the new park? I believe that with all the issues that Disney came across with EuroDisney and Hong Kong, which were completely opposite issues, Disney has learned a great deal.

I know they would hate to lose more money, therefore would research very carefully their next project before going forward with it. They did make a lot of mistakes, but they also learned from them. Disney has extensive experience now in opening theme parks. In such a successful organization I have to believe that they learn from their mistakes. After all Walt Disney is said to have gone bankrupt before making it big with Disney animation and he certainly set the example for learning and prospering from his errors.

Disney will do their homework in future. They will understand the culture, the country, this history and the potential difficulties before embarking on a new venture. In addition, they will have a team of nationals and Disney staff who speak the language fluently to help the American team. Finally, they will have a group ready and able to handle media and cultural crises promptly and tactfully. Hindustan Lever Ltd exploited the cultural preference of light skin complexion to dark skin color in India and lunched an unethical promotional campaign that portrayed light skin superiority and gender inequality.

The advertisement campaign created a strategic weakness for HLL which CavinKare Ltd capitalized on to lunch a counter attack by developing an advertisement that is culturally more appealing to a wider segment of the Indian society. Despite this HLL continued its unethical promotional strategy with a little modification which still portrays color preference.

This case analysis will analyze each question in the case analysis in relation torelevant international marketing concepts. Questions and Analysis This case analysis has eight questions that defined and explained the fundamental dynamics of culture in promotional strategies business organizations apply to gain competitive advantage and push their products to all segment of the market.

Basically business ethics is a professional ethic that examines and explains the ethical principles and corporate effort made by a firm to comply with the global best practice. The implication is that businesses try to evaluate the ethical impact of their business practice if itis in line with the generally accepted business practice standard and socially responsible to the general public.

Cateora et al, explained that ethical principles provide the framework to help the marketer or firm distinguish between right and wrong, determine what ought to be done and properly justify its actions p.

In this case study Hindustan Lever Ltd in a quest to maintain market leadership lunched series of adverts that portray women with fairer skin as more attractive, happier, intelligent and higher social status. In fact, skin color has been a powerful theme in India and entire Asia with light skin representing positive values for class and beauty.

So to address the issue of selling products that are mildly effective I must point out here that it is unethical business practice. However Indian dermatologists pointed out that fairness products do not actually work because the only reach the upper layer of the skin and do not affect the production of Melanie.

This fact was corroborated by many people who complained that it does not work. Is it ethical to exploit cultural norms and values to promote a product? It is not ethical to exploit cultural norms and values to, promote the product as the cultural norms and values plays an integral part in promoting the product but point should be considered that the advertising is providing benefits to the society rather than doing any harm to the society.

Human dignity should be taken into consideration while promoting through cultural aspects. From this case it is clearly observed that sales of the products are based on the success of advertisements. Skin color is a powerful theme in India and much of Asia where a lighter color represents a higher status.

This idea has strengthened and supported in the advertisement by taking the advantage of the dark skin of the people in India and emphasis on the benefit of having a lighter color skin. The ad went on to show there was a struggle with finding work opportunities because no son was present and it was harder for darker tone women. After the daughter began using the cream her skin tone starts to lighten.

The daughter was then able to acquire a job as a stewardess while treating her father to five course meals. These ads were racially biased due to the fact that they were implying that lighter tone women will have more opportunities than darker tone women. Fair and Lovely has advertised its products in this way. The derision of any race, caste, skin color, creed and nationality should be avoided in the advertisements. However, pulling off those unethical advertisements off air; sponsoring career fairs in over 20 cities; offering counseling in over career areas and supporting rural scholarships for women on vocational programs helped to reposition Hindustan Lever Ltd as a socially responsible corporate organization.

I believe to counter the charges of unethical advertisement leveled by AIDWA, Hindustan Lever Ltd needs to sustain the foundation to continue to discharge the corporate social responsibilities that informed its establishment. However, HLL should innovate new promotional strategy that will align positively with the Indian culture.

If having fair skin is part of your culture then so be it and if you choose to use a product that lightens your skin use it. The most important thing is for HLL to re-evaluate the cultural impact of its advertisement theme as regards to the complaint and charges level against it by AIDWA. These questions include the following: 1. Does the advertisement promote son preference? Does the advertisement insult the working women? HLL management should go back to the drawing board and map out new promotional strategy that is ethical and acceptable by the Indian society taken into cognizance the cultural imperatives, electives and exclusive and adapt them positively to the Indian culture.

The new promotional strategy should not denigrate women but should show positive virtues of womanhood. Although I do not think love is based on skin color. Is it wrong to promote what the company sells? They could make different commercials without comparing two different skin tones, maybe making a commercial with the products results.

A before and after commercial might be better so the people buying the product would know what they are buying. If you want lighter skin you want to be fair. If you want whiter teeth you buy whitening gel, to me it's the same thing. I will use the three ethical principles as a framework to determine what was wrong with the old promotion strategy and also determine what ought to be done.

The three ethical principles include: 1. The utilitarian ethics: this probes into the cause of the problem and identify the principle subject of the problem.

Rights of the parties: This try to find out if the rights of the parties are respected. Justice and fairness: this principle seeks to find out if the canons of justice or fairness to all is respected Cateora et al. Moreover, I would develop a campaign exploring the different types of women, demystifying the beauty stereotype reigned in India.

This will change the entire old perception of the brands and reposition these products among both fair and dark skinned people in India in a more ethical manner. Firms should conduct researches and make provision for variance in research result to accommodate possible adjustment in the future due to shift in cultural trend.

Shakti Ammas is a traditional Indian classification of social status based on the color of the skin. This system emphasizes on whiteness as higher status and positive value while dark as lower status. The implication is that skin color is closely identified with caste and is laden with symbolism.

This became cultural norm over time. This is manifested in the Shrinking number of men and women in India who think lighter skin is beautiful. Factual knowledge is more obvious and can be learnt while interpretive is about acknowledging and accepting different cultural traits and patterns.

Hindustan Lever Limited HLL should conduct research on current cultural trend and modern role of women instead of exploiting out-date and controversial cultural norms that are not fit to the present cultural environment.

Q Is what Frank did estimable? By whose ethics- those of Latino or the join States? Ethical is defined as conforming to authoritative standards and consistent with agreed principles of correct moral conduct.

Franks choice to implement bribery in those of Latino is ethical. In the definition above, being ethical or unethical is in the eyes of the country. If the country doesnt view this as an subject area then neither should Frank. However, in the United States, this bribery would be considered unethical because of the morals that the U. Even though this may be ethical in Latin, bribery is still considered to be black when it comes to the foreign cosset Practices Act.

The Foreign Corrupt Act states that it is improper to bribe foreign government officials to obtain or hold open business. The Omnibus Trade and Competitiveness Act of reduces liability of collective offices from having reason to know about bribes, and also permits lubrication payment if universal in the culture. The choices that Frank is making may be ethical in Latino, but it is definitely felonious. Frank is a United States citizen and just because he relocated to Latino, he still has to surveil the rules of the Foreign Corrupt Act.

In this case, Frank is making illegal bribes by bribing a jefe versus bribing the dock workers. QIdentify the types of payments made in the case; that is, are they lubrication, extortion, or subornation? The money given to jefe was an slip of extortion. It was apparent that the jefe did not use the money that was given to him to remedy the supposed damages that he claimed he would fix. An example of lubrication in this case is when Frank gave the dock workers a fistful of pesos to vivify up the process of transferring the machines to Latino trucks.

Q Frank seemed to imply that there is a similarity between what he was doing and what happens in the United States. Is there any difference? Frank says that when you have big dinner parties where different treatment or close businesses and stakeholders pay the bill, is a tipe of bribery.

The difference is that in the U. Any ethical differences? Yes, there are differences between the two cases. Chief bribe is unethical way of making business to increase and this effort is not made by the company, instead giving money to the workers, is a means of motivation to increase their efficiency and thereby help the company. Within ethical codes, here is a way to encourage but it still being a bribe. Who is right? S Company are trying to establish a new business system, without bribery and honest practices, regardless of whether the country you are working methods involve the use of bribes and are seen as normal.

Franks attitude would must always be with ethical codes continue talking with the government to get what they wanted but this not means a bribe, instead negotiating. Frank had to wait for American mechanics or find another solution within the same country.

If I had done this, you probably would have lost the client and their profits, but had established a cleaner and proper business conduct. Within the policies of the company there is no possibility of bribing, but if this happens, as in the case of Frank, former president of the company preferred to skip this, because he gave more importance to the profits it was generating Frank, no matter how it was generated. Q Explain how this may be a good example of the SRC self-reference criterion at work.

This is a perfect example of the SRC, because he closed his view to himself and nothing else, and belittles the work of the other people. Q Do you think Bill will make the grade in Latino? Why or why not? What will it take? Bill will succeed in Latin as honest working methods establish and implement the strategy that worked well in the United States.

He will need strong strategies based on cost or differentiation to compete healthily without bribes. Q How can an overseas manager be prepared to face this Any manager that aims to work abroad in the future, you will need excellent training.

This training should address issues such as practices, norms, lifestyles, culture, etc.. Your skills and abilities will give you the tools to resolve conflicts that may arise. The party which suffered significant loss should be the state as the Belgian government had Answer: The public relation staff should understand the driver behind these articles which is the interest the target audience of these magazines has in such articles.

The PR staff should engage their business leaders with various popular magazines and journals for preparation and publication of businesses cases, share information about deals as and when it can be made public, use these medium particularly to advertise about the company to sow doubts on the credibility of the projections of the publisher.

Answer: Boeing which used to be the market leader during the 70s has lost ground since Airbus has entered the market but it has made efforts at all levels including marketing, technological advancement, pricing and politics to counter the Airbus attempts to clinch further share of the segment. Boeing has to be vigilant of such arrangements in future too and should lobby in cooperation with the US government to prevent such grants Organization Structure: There have been many instances in the past where business entities have been created to sail the deal through.

Boeing should try to bring transparency in to the organization structure, establish entities across key geographies and share the deal information in the public domain as and when possible. How and why? Answer: Marketing efforts of the companies are guided by the corporate objectives decided by the top management. Airbus has relied more on politics and influencing key decision-makers to clinch the deals than on communicating the key features, Total-Cost of Ownership and service contracts Boeing on the other hand seems to be behaving more like a market leader who has invested on technological prowess, tried to maintain the market share and grab deals by communicating features, TOC, transparency and service agreements.

Answer: The OECD convention binds each of the signatories under anti-bribery statutes which demands strict accounting, cooperation to investigation, incorporate legal procedures against bribery within the domestic laws and treatment as an extraditable offence.

If France had adopted the OECD convention on bribery the stated cases would not have taken place in first place or the responsible parties have been persecuted. Knowing that in case of an investigation they would have to furnish the demanded details Airbus would have refrained from being party to such a contract Thus OECD would have reflected drastic changes in the company operating procedures and accounting methods.

But, internationally struggle towards improving its image, especially in certain countries, after the new trends towards stopping childhood obesity. What could have prompted the Golden Arches and set up an enterprise that will compete against McDonald's?

What are the adverse effects in the McDonald's Company as a result of changing its Menu? What will management do to maintain the stability and position of the company in the market? Areas of Consideration ACA Case Approach: The case is reviewed and analyzed with the liable information that can be found in the internet. It is approached with limited information about McDonald's setup. McDonald's should target its Ronald to do more advertisement for healthy food and nutrition.

McDonald's should help and donates of position its earning to Ronald McDonald's house which helps children with life threatening illness. McDonald's should label their food with amount cholesterol and sugar. They should encourage kids to eat healthier foods and by adding toys to healthy foods only.

Decision Made After exhaustive contemplations, it is decided that alternative no. By putting a label with their food content McDonald's can rapidly minimize the controversy about their product that most of people blame for obesity in their country.

In that way McDonald will not be blame responsible for the cause of obesity in their country. On the marketing side, focusing on only one niche has proven as the success in many related cases. This allows the company to concentrate fully on its products and its development as well as in servicing its most profitable market; there is a great responsibility that its name can be equated with its products.

This is the law first to market in marketing. By focusing narrowly in the production of fast-food industry. It also utilizes its resources better. No What are the characteristics of the car rental industry? How do these characteristics influence the design of service delivery processes in this industry in general? In general, services are characterized by their intangibility; perish ability, heterogeneity and simultaneity. But different services vary significantly in the extent to which these characteristics hold.

Intangibility While strictly speaking, the "service" of car rental is intangible, given the physical nature of the rented vehicle, it really is not as intangible as many other services in the sense that the consumer can see and touch the rented vehicle.

For the vast majority of the period during which the customer uses the service of car rental, the physical car is the service provided. For many services, intangibility makes it very difficult for the consumer to judge quality and for the producer to control quality.

This is not nearly as difficult a proposition in the case of car rental. The "convenience" factor e. If a day goes by and a car is not rented, the opportunity to generate revenues from that unrented time is lost forever. Perishability is a critical factor in the rental industry given the generally high fixed cost associated with the service i.

All industry players must cope with this perishability and different companies will have somewhat different strategies for dealing with it. Heterogeneity Car rental is not a particularly heterogeneous service, as compared, for example, to the services provided by a doctor, an architect, a lawyer or a hairdresser. While customers may request different vehicles or different extras e.

Further, the basic interaction or contact that employees of the rental car company have with customers is going to be very similar. Simultaneity The issue of simultaneity is not a major issue for the car rental industry. The service being provided by the car rental industry is the use of a vehicle in a location where the customer both needs one and does not have one i. While there is simultaneity in the sense that the customer and the vehicle are together during the time that the service is consumed, most of the process of creating the service.

EasyCar obviously competes on the basis of low price. What does it do in operations to support this strategy? Once the student understands the characteristics of the car rental industry from a service design perspective, the discussion can move to how easyCar's operational design allows it to compete on the basis of price.

The key point to drive home is the extent that easyCar has gone to align its operations strategy and process design with its business strategy. Clearly the order winning criteria in this case is low price.

Perhaps the best way to make this point is to explicitly compare easyCar's operations with the operations of a traditional car rental company. Exhibit TN-1 shows this comparison. After having gone through this comparison, the instructor can ask students why all rental car companies don't follow easyCar's lead and reduce their costs in this manner.

Doing this drives home the link between the operations design and the business strategy--that is, the traditional car rental companies have strategies focused more on flexibility and service, and as such have different order winning criteria and different operational designs to support these criteria.

Finally, once the components of the easyCar operations systems have been brought out, they can be used to make the point that many of the methods that easyCar uses can be thought about as applications of production line approaches applied to a service context. This point is particularly worth making if students have been assigned to read Levitt's "Production-line approach to service". The easyCar situation clearly illustrates the ideas of service standardization, reducing the discretionary action of employees and using technology to support or substitute for people in the process.

How would you characterize the level of quality that easyCar provides? Asking students about quality is a logical follow-up to the previous question focused on cost. Discussing quality is important so students see that low cost does not necessarily imply low quality in the minds of the customer. The discussion can also be used to illustrate several important service quality concepts.

One way to begin this discussion is to ask what quality is in this case in the mind of the consumer. Clearly easyCar is targeting a particular segment of the market that is very price conscious, but the students should recognize that "quality" in the consumers' minds is more than simply a low price or alternatively, the needs of this segment is more than simply low price.

The idea of value as a concept relating both quality and price can be introduced here, with value equating to the benefit of the service provided relative to the price paid. This discussion can also be used to introduce Garvin's eight dimensions of quality as a way to better understand the multidimensional nature of quality. Garvin's dimensions are: performance, features, reliability, conformance, durability, serviceability, aesthetics, and perceived quality.

EasyCar's customers would likely define quality in terms of the basic functionality i. The instructor can next ask students why easyCar started with a fleet of Mercedes A- class vehicles or students may raise the issue in the context of aesthetics from the discussion of Garvin's dimensions. This choice seems inconsistent with easyCar's positioning as a low cost provider, and indeed the company has recently switched and is now using more Vauxhall Corsas and similar vehicles.

The key to understanding the launch of easyCar with the more expensive Mercedes is that easyCar did not want to be perceived as a low quality service provider this comes through in the quote in the case from Stelios about not compromising on the hardware. The importance of the Mercedes A-class is not just for the current customer.

EasyCar does not want customers to be surprised by any of the features of its service that are different than traditional car rental companies, as such surprises would have a negative impact on the customer's perceptions of service quality. Is easyCar a viable competitor to taxis, buses and trains as Stelios claims?

How does the design of its operations currently support this form of competition? How not? EasyCar sees itself as a potential competitor to taxis and buses because it allows customers to rent a vehicle for as little as one hour. From easyCar's position, this makes sense as part of their effort to achieve maximum utilization of their fleet. If they can rent out a car for even an extra one or two hours when the vehicle would otherwise sit in a garage unused, then it adds to their bottom line.

Further, it is possible that such very short term rentals seem most likely to come during the work week, a traditionally slower period for easyCar given its primary appeal is to leisure travelers who demand vehicles more on weekends than on weekdays. In this way, the very short-term rentals may help balance out demand on a weekly basis. The question is whether these forms of flexibility are sufficient to make rentals of a couple of hours appealing to customers.

There are several significant limitations from the customer's perspective that will likely limit easyCar's ability to attract these customers. Once the customer picks up the car, he or she will then have to put gas in the car before it is ready to go.

The point to make is that most of easyCar's processes are tailored much more to the customer who knows his or her travel plans well in advance and has the extra time to go to a secondary location and perform some of the traditional service themselves. This does not seem compatible with the renter who might want to use the easyCar for an hour or two on short notice instead of taking one or a couple of taxi rides.

For easyCar to successfully compete for such customers may require changes to its service process. Such changes might include, for example, a relaxation of cleaning policies e.

Having many locations in the same city also clearly makes easyCar a more viable competitor to taxis, buses and car ownership. This has significant implications to easyCar's expansion strategy. If it truly wants to compete against taxis, buses and car ownership, it will focus its expansion on opening multiple locations in the major European cities.

If it sees itself more as competing for tourist customer, it will open more locations in tourist destination locations, either near airports or train and bus stations. What are the operational implications of the changes made by EasyCar. A total of five recent changes are identified in the text that easyCar has made in the last year.

Discussing some or all of these is designed to reinforce some of the proceeding lessons The discussion can also be used to emphasize that all companies, regardless of what their competitive priorities are, must still seek continuous improvement in their methods.

Introduction of vehicles other than the Mercedes A-Class--Perhaps the most interesting change that easyCar made, other than allowing rentals of only an hour, was to move away from its one car model and offer a number of different, although generally similar, vehicles at its different locations.

The case indicates that the change was made to keep pressure on suppliers i. Any car can go to any customer and significant economies of scale would exist in the maintenance of the fleet. However, having different vehicles at different locations reduces easyCar's flexibility to shift vehicles between locations easily if demand is greater at one location than at another.

Clean Car Policy This change is clearly very consistent with easyCar's low cost strategy. Basically it represents a transfer of a task traditionally done by the company to the customer. Operationally, it has several implications.

It reduces the need for staff at the rental site, helping easyCar reduce one of its costs. More significantly, perhaps, it also speeds the turnaround of a vehicle. That is, this policy combined the empty fuel policy, means that most vehicles are returned in a condition that allows them to be immediately rented to the next customer. This helps easyCar maintain a very high fleet utilization.

Empty-to-Empty Policy This change, like the previous one, is clearly consistent with easyCar's low cost strategy. Operationally, the empty-to-empty policy would seem to significantly reduce the chance that an easyCar employee would have to deal with the gas level.

Previously, customers had to worry about taking the time to fill the tank. Customers running late might skip this step to save time, leaving the task for an easyCar employee. With the new policy, the gas can be at any level as long as the low fuel indicator light is not on. Combined with the previous change, this policy basically means the vast majority of customers bring their car back in a condition that allows it to be immediately re-rented.

Requiring Customers to Purchase Insurance This policy change probably has greater implications on the marketing side than on the operations side. Operationally, however, it greatly reduces the likelihood of conflict between customer and easyCar employee when a customer returns a damaged car. Previously customers who did not purchase the optional insurance had some liability, and the employee on duty would have to sort this out with the customer. This can be a timely process, and present difficulties particularly for a location staffed by only one person.

Such incidents would likely cause delays for other customers attempting to pick up or return cars at the same time.

How significant are the legal challenges that easyCar is facing? Clearly the OFT ruling against easyCar is much more significant than is the posting of the pictures of renters with overdue vehicles. Discussing the OFT ruling against easyCar is designed primarily to reinforce the cost benefits gained from easyCar's demand management system and its high utilization rates it achieves.

While these estimates are in all likelihood an overly pessimistic assessment of the impact, the impact none the less would be significant given the central role yield management plays in easyCar's approach. Further, it is worth using Stelios' estimates to give students a better feel for the significance of the high utilization rate that easyCar achieves.

Further, current easyCar facilities rent as few as spaces in a parking garage to operate a fleet of cars. Students could be asked what would happen to easyCar's hoped for 10 million [pounds sterling] profit if it had to purchase an additional 9, vehicles and quadruple the size of all of its facilities.

Going through this analysis and asking students to think about and calculate the impact on profits should drive home the cost savings achieved from the high utilization rate. The other legal challenge easyCar faces deals with its posting of the pictures of customers with overdue vehicles. This is not as significant, both because its impact is not as great and because no legal action has yet been taken.

The value of including this in the case, and possibly in the discussion, is two-fold. First, it indicates to students the significant cost of this problem to the rental car industry. Second, it illustrates that basically a "zero mistakes" process must exist for implementation of this policy to minimize the chance of any legal claim against the firm.